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Gold holds near seven-week high as investors price in more Fed rate cuts - YAHOO FINANCE
Gold (GC=F)
Gold prices held near their highest level in more than seven weeks on Monday as further US Federal Reserve cut bets and a weaker dollar supported demand.
Gold futures rose 1.2% to $4,381.10 an ounce, while spot gold climbed 1.3% to $4,349.73 at the time of writing.
“Gold is likely to remain well bid into US non farm payrolls, as evidence of labour market slack would keep front end yields capped and the dollar weak, supporting a push toward $4,380 to $4,440 after a firm rebound from the $4,243 support zone,” said Kelvin Wong, senior market analyst at OANDA.
Markets remain focused on the Federal Reserve’s policy outlook after the US central bank delivered a 25 basis point rate cut last week in a rare split decision, while signalling a likely pause as inflation remains sticky and the labour outlook uncertain.
Investors are currently pricing in two rate cuts next year, with this week’s US jobs report seen as a key test of those expectations.
“Gold trades sharply higher above $4,345, closing in on its all-time high as the macro backdrop turns supportive with the Fed cutting again, and we could see a year-end run higher,” said Neil Wilson, UK investor strategist at Saxo Bank.
Non-yielding assets such as gold typically benefit from a lower interest rate environment.
